How LandGate Calculates Your Mineral Rights Value

Key Takeaways:

• Public Data Utilization: LandGate uses public and easily accessible information such as net mineral interest, lease status, royalty rates, and current oil and gas prices to begin valuation.

• Advanced Data Analysis: They incorporate detailed data like proximity to producing wells, geological formations, and well density to enhance accuracy.

• Comprehensive Evaluation: Factors like future well types, lateral lengths, and production start dates are considered to maximize valuation.

• Economic Forecasting: LandGate uses economic data to derive cash flow forecasts and market values, ensuring precise mineral rights valuation.

• Target Audience: Their services cater to mineral owners, buyers, oil and gas companies, and tax attorneys seeking accurate mineral rights valuations.

Everybody claims that they know how to calculate the value of oil and gas mineral rights and the average price per acre for mineral rights. A quick Google search will show you how many companies claim that they are the best. One company even states that it is not possible to accurately calculate the value of mineral rights. At LandGate, we know it’s possible.

First, let’s make two lists essential to calculating mineral rights value.

The first list is public data and other information needed to begin to know just how much your mineral rights are worth. This would be the information most companies might use to calculate the value of your mineral rights. The second will be a list of additional detailed data and information LandGate uses to accurately calculate the value of mineral rights to determine exactly what they are worth.

LIST 1 – Public or Easily Accessible Information for Mineral Rights Value

1. What is your net mineral interest in the tracts being evaluated?

2. Are your minerals leased?

3. If your minerals are leased, what is the royalty rate in your lease?

4. Are you currently receiving royalty payments?

5. If so, how long have the well or wells been producing?

6. Oil and Gas prices

LIST 2 – The LandGate LandEstimate™

Our mineral rights estimates account for a variety of different factors to provide mineral owners with accurate data:

1. Assesses how far your minerals are from producing and/or planned wells

2. Takes into account data about how many wells operators have permitted near your minerals

3. If your minerals are leased but not producing, our dataset analyzes if any wells have been permitted on or near your minerals

4. Oil and gas geological formations that have been permitted or produced near your minerals

5. If future wells to be drilled near or on your minerals will be verticals or horizontal wells

6. The lateral length of future wells to be developed on or near your property (1 mile, 1.5 mile, or 2 mile horizontal wells)

7. Based on well density in any particular oil and gas field, we maximize the number of wells that can be drilled on your minerals, adding significant value

8. We have decline curves, detailing future production volumes on nearby wells

9. Type curves (average well performance) for every basin and formation in the US. This is updated monthly and used to assist in projecting better forecasts for complex reservoirs

10. Production start dates for wells yet to be drilled or completed

11. We calculate basin deductions for oil, gas and NGLs in order to properly calculate forecasted revenue

12. Ratios for Gas to Oil, Gas to Water, and Water to Oil

13. We know the required capital costs and monthly operating expenses incurred by the operator

14. We use all of the economic data to derive accurate cash flow forecasts and market values for mineral rights all across the U.S.

Where do most of our requests for mineral rights estimates come from?

1. Mineral owners who have received an unsolicited offer in the mail and want to know what their mineral rights are worth. The common question is, what are my minerals worth?

2. Mineral owners who received an offer on a per acre basis and want to know their mineral rights value per acre. The common question is, did I receive a fair offer for my minerals?

3. Mineral buyers searching for a mineral interest calculator to determine how much they can afford to pay for minerals on a per acre basis

4. Oil and gas companies looking to make an offer on another oil and gas company’s assets

5. Oil and gas companies wanting to sell their interest in oil and gas wells

6. Tax attorneys needing a step-up in basis for their clients who inherited mineral rights and need to know how much the mineral rights were worth at the time of inheritance

At LandGate, we take the guesswork out of understanding how much mineral rights are worth. Many companies online offer oil and gas mineral rights calculators, but they don’t necessarily take into account everything that LandGate does, and therefore may not be as accurate. To receive a free estimate for the value of your mineral rights, get your free property report on our map today:

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